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Business Brokers

Learn More About The Life Of A Business Broker

When business owners want to sell their companies, they enlist the help of a business broker to find buyers and ensure the transaction happens discretely. Business brokers are used so that owners get the most money for their businesses, and so the transition of ownership does not disrupt daily operations within the company.

There are multiple factors to consider when selling a business, that is why it is best practice to bring a business broker that is familiar with finding buyers, exit strategies, valuation, confidentiality and legalities in order to fulfill a successful transfer of a business.

Bringing People With Common Interests Together

Business brokers build professional relationships with parties that buy companies, and have the finances readily available to arrange deals with sellers. Most business brokers worth their salt will have a group (or multiple groups) of potential buyers that deal with specific industries and types of business models, so that sellers can be assured that their companies are in good hands during and after the transaction. A business broker will find out the requirements of sellers, and then try to match them with potential buyers – acting as a liaison between both parties in order to get both parties to come to an agreement, while allowing them to preserve their respective interests.

Exit Strategy

Business owners sometimes need an exit strategy. Some entrepreneurs are looking to move onto other ventures, or they simply want to retire from their industry. Instead of placing an ad announcing the sale of the business – which would cause the value of the company to plummet – they see out business brokers to arrange a deal with a buyer in order to get the highest price possible for their business. Business brokers help owners get the best price for their companies, while also ensuring that the business is getting purchased by someone who will continue the successful track record.

Valuation

Business brokers have to balance getting top dollar for their clients’ businesses, while also keeping the price and terms attractive to buyers. To do this, a business broker uses a number of formulas based on the type of industry, financial history, profitability, assets, liquidity, and other factors relevant to the company. The broker then uses those numbers to figure out a profit margin to add on top of the valuation, so that the business owner can sell the company at a realistic price.

Siding With The Seller

Most business brokers operate under the claim that they do not get paid until their clients sell their businesses. This gives business brokers an incentive to get the best price for their client’s business when trying to match the seller’s requirements to a potential buyer. A good business broker will have no problem rejecting offers that fall short of the seller’s expectations, and then working to negotiate a deal as offers get closer and closer to the target selling price and conditions that were laid out at the beginning of the relationship.

Confidentiality

It is essential that a business owner’s employees, customers, and competitors do not find out that the company is being sold. This can cause loyalty to falter, and decrease profitability – and therefor lower the value – of a business, making it harder for a business broker to get top dollar on a sale. Before engaging any buyers, business brokers and all parties involved usually sign non-disclosure agreements in order to keep any information about the potential sale under wraps until after everything is finalized. This allows the business broker to drum up offers from buyers by teasing information without blatantly announcing which business is for sale, or who the seller is.

Legalities

All business brokers are well-versed in federal, state, and local legal guidelines in order to structure a deal that is amenable to both the seller and the buyer. However, sometimes both parties want to place special conditions and covenants into the agreement, at which point the seller, buyer, and the business broker should consult with their respective lawyers to make sure the transaction will still go smoothly.

Commercial Financing

There are situations in which a buyer is seeking an existing company to purchase, but the price is outside of what they have to offer. In these cases, a business broker might want to suggest the buyers seek external financing, and work those terms and conditions into the agreement. Sometimes commercial financing can be arranged so that the seller is directly involved to ensure the business stays successful during the transition in ownership until the financing is paid off. Again, the terms of commercial financing will dictate how involved both parties are in the transition, and for how long.

Become A Commercial Finance Consultant and Work Directly With Business Brokers

The Commercial Capital Training Group (CCTG) teaches people to be commercial finance professionals, which is a necessary skill for business brokers who want to keep operations in-house. Not only will business brokers be able to arrange agreements between buyers who want to acquire companies and sellers who want to get the best price for their businesses – but brokers will also be able to arrange the financing of the purchase and receive extra revenue from those deals, as well. CCTG will provide the tools and training necessary for business brokers to help buyers get the financing they need.

The Commercial Capital Training Group has a board of lenders with over 50 years of experience in a wide range of industries, including business acquisitions, and our panel of commercial finance professionals is available 24/7 to help business brokers get past any snags to structure the financing their clients need in order to purchase the businesses they want. CCTG trains business brokers to create multiple streams of revenue – from the amount earned for finalizing deals, to building in recurring payments to form residual income between major financial arrangements.

The Commercial Capital Training Group allows business brokers to earn a six-figure income simply by helping to arrange the financing for sellers to purchase businesses, on top of the income for the core acquisition agreement.

If you are a business broker, and you want to cover not only the buying and selling agreements, but also bringing parties together to finance the purchase of businesses for your clients, then check out the Commercial Capital Training Group to see how you can multiply your revenue on every business brokering deal you make.

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